fight chargebacks before they happen -...

Fight Chargebacks Before They Happen Presented By: SignatureLink, Inc.

July 11th 2012

Agenda •  Global Epidemic •  Signature Psychology •  Burden of Proof •  Forensic Evidence •  Solution

Fight Chargebacks Before They Happen Presented By: SignatureLink, Inc.

July 11th 2012

•  Friendly Fraud is becoming a Global Epidemic •  Costs retailers over $20 Billion per year* •  Online companies pay $2.40 to recover every dollar of chargeback

fraud* •  3% to 4% of retailers’ total revenues are consumed with the costs

of dealing with chargebacks** •  49% of online fraud is written off as the cost of doing business^ •  Backdoor in the from of credits^ •  Cybershoplifting

*Source: 2011 LexisNexis / Javelin Strategy & Research **Source: Accertify, a subsidiary of American Express ^Source: CyberSource 2012 Online Fraud Report

Fight Chargebacks Before They Happen

How simple psychology can work in your favor and deter criminals from targeting your online store in the first place. •  Credit card companies have required a signature on in person

sales transactions since their inception •  Two reasons driving the requirement

•  Legal requirement to consummate the sales draft creating a legally binding sales agreement

•  Psychology behind the mental requirement required when signing your name to any form of agreement

•  Any credit card sales draft that does not carry a consumers signature is automatically disadvantaged from a defense standpoint.

Simple Psychology

Both merchants and consumers must be held accountable for an eCommerce transaction. •  Merchants bear burden of proof. •  Quasi refund. •  Invalid chargeback still equals provisional credit. •  Cardholders not contacting merchants prior to filing chargeback. •  Merchants need ammunition to prove transaction was legitimate.

Accountability

Forensic evidence banks require in fraudulent chargeback cases •  Key to gathering forensic evidence is clear chain of custody. •  Avoid allegations of tampering/falsifying of documentation. •  Challenge of evaluating eCommerce forensic documentation is a

biased or tainted chain of custody. •  No method of establishing validity of evidence (no clear chain of

custody) = merchant is automatically at a disadvantage.

Forensic Evidence

Forensic evidence banks require in fraudulent chargeback cases •  Solution is to have all sales drafts/transaction details warehouse

by a trusted PCI compliant neutral third party. •  Third party can attest to the validity of the documentation •  Bank chargeback analysts rely on the validity of supporting

documentation. •  No longer discounted in the presence of conflicting documentation

from the consumer.

Forensic Evidence

ü  If you can determine up-front with a high degree of confidence that a transaction is known to be fraudulent, stop it!

ü  A standard online transaction can have up to 10 separate processing fees

ü Up-front fraud screening reduces payment processing expenses

ü Up-front fraud screening will reduce the processing load on IT infrastructure

Behavior Analysis, Device Authentication and Pre-Screening

Magento® SecureBuy™ Solution SecureBuy is a fraud prevention and management system that consists of four components:

1. Up-Front Fraud Screening - ThreatMetrix

2. Hand Written Signature Capture - In the history of mankind, the most dominant building block of commerce has always been the handwritten signature

3. Inline Terms & Conditions within the checkout process

4. Chargeback Management System - TransExam

SecureBuy™ Up-Front Fraud Screening ThreatMetrix is the first industry solution that integrates sophisticated malware detection and advanced device identification technologies in a single, unified platform •  Detecting hidden proxies or automated by botnets •  Detecting true IP address and geo-location •  Preventing transactions from suspicious computer configurations •  Reduce fraud and chargebacks using real-time fraud prevention •  Prevents malware and targeted Trojans •  Reduces manual review costs and improve customer satisfaction

SecureBuy™ Hand Written Signature Capture •  The SecureBuy signature pad can be signed with a mouse, stylus

or finger

•  SecureBuy is payment type neutral and will work with any payment gateway or form of payment incorporated within Magento

•  SecureBuy uses the same signature capture technology as big box retailers, FedEx, UPS, Square, and Triangle

•  Reduces friendly fraud, purchase disputes, increases customer confidence and conversion rates

Magento® SecureBuy™ Inline Terms & Conditions •  SecureBuy incorporates the merchants terms and conditions of

the sale, including return and refund polices within the checkout process

•  Assists the merchant in being compliant with acquirer and disclosure regulatory requirements

Magento® SecureBuy™ TransExam™

•  TransExam automates the retrieval request & chargeback process

•  The issuing or acquiring bank can be provided with a customer signed forensic sales draft within seconds in response to a retrieval request or chargeback

•  The SecureBuy sales draft is a PCI compliant document and is securely warehoused by SignatureLink

•  All SecureBuy & ThreatMetrix and reporting functions are incorporated within the Magento administrative area

Kevin Smith SignatureLink, Inc. 605 Crescent Blvd., Suite 200 | Ridgeland, MS 39157 Office: 800 511-2050 EX 140 | FAX: 800 874-0955 Email: ksmith@signaturelink.com Website: www.signaturelink.com

Magento® SecureBuy™ Sales Support